Reward Management Challenges in Strategic HRM
This paper examines the relationship between reward management and strategic human resource management (HRM). It first investigates why reward management poses significant challenges to strategic HRM, focusing on three core problems: the difficulty of tailoring rewards across diversified organizations, the tension between hard and soft HRM approaches, and the inflexibility of many reward systems in dynamic environments. The paper then outlines how organizations can integrate reward management into a broader HRM strategy by following a seven-step framework, with particular attention to designing and implementing a total reward strategy that aligns financial and non-financial incentives with corporate objectives and individual employee needs.
- Introduction to Strategic HRM: Defines strategic HRM and its integrative role
- Why Reward Management Is Problematic for Strategic HRM: Three core challenges linking rewards to strategy
- Integrating Reward Management into HRM Strategy: Seven-step HRM framework for reward integration
- Total Reward Strategy: Financial and non-financial incentives combined
- Implementation and Evaluation: Barriers to effective reward strategy implementation
- Conclusion: Rewards must align with objectives and implementation
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What makes this paper effective
- It structures the argument as two clear, well-defined questions, each receiving thorough treatment before moving to the next, giving the paper logical coherence.
- It grounds abstract concepts in concrete examples — the Sears, Roebuck and Co. case effectively illustrates how misaligned rewards undermine strategic objectives.
- It balances theoretical framework with empirical evidence, citing CIPD survey data to support claims about the real-world inflexibility of reward systems.
Key academic technique demonstrated
The paper demonstrates the use of a problem–solution structure across two connected analytical sections. The first section identifies and categorizes obstacles to reward integration; the second proposes a practical framework to overcome them. This approach shows how academic writing can move from diagnosis to prescription, a common and effective technique in applied management papers.
Structure breakdown
The paper opens with a conceptual introduction to strategic HRM, establishing the integrative logic that connects HR practice to business objectives. It then addresses three specific problems with reward management — diversity of goals, hard vs. soft HRM tensions, and reward inflexibility — before pivoting to a constructive seven-step HRM strategy framework. The reward strategy discussion culminates in a treatment of total reward approaches and closes with an implementation-focused conclusion.
Introduction to Strategic HRM
In order to gain an accurate understanding of the problems that reward management poses to strategic human resource management (HRM), a deeper understanding of the latter concept is necessary.
Strategic HRM is a relatively recent trend that has moved away from viewing people as simple resources handled separately from company objectives, integrating them instead into the overall business strategy. This major shift relies heavily on the conclusion that intangible assets are what make the difference in today's competitive environment. Among these, human resources are the most prominent, capable of shaping a corporation's trajectory in either a positive or negative direction depending on the skill with which they are managed.
As S. R. de Silva (1998) pointed out, HRM has shifted from a focus on employee welfare toward obtaining the best possible productivity from personnel. Strategic HRM therefore correlates the management of people with corporate strategy. This relationship is mutual: HR policies and actions derive from business strategy, while the skills, knowledge, and motivation of employees also have a great impact in shaping the company's course of action.
If we resort to an analogy between an organization and the human body, strategic HRM subordinates human resources to major corporate goals in the same way that arms or legs move according to what the brain dictates. This coherence between managing employees and attaining objectives results in increased market value for products or services and, implicitly, in a competitive advantage. Therefore, the HR strategy should be designed according to the nature and structure of the business (De Silva, 1998) and should continuously monitor changes in corporate goals in order to adapt to new requirements in a timely manner.
Yet, however optimistic this integrative approach may sound, certain elements hinder its full application. One of these impediments concerns rewards, which are difficult to align with company goals for several reasons discussed below.
References
De Silva, S. R. (1998). Trends in human resource management and management objectives. International Labour Organization. Retrieved from www.ilo.org/public/english/dialogue/actemp/papers/1998/srshrm.htm
Developing a HRM strategy. (2007). Retrieved from www.accel-team.com/human_resources/hrm_08.html
More flexibility in reward strategies could assist public sector efficiency drives. (2006). CIPD. Retrieved from
Reward strategy. (2007). CIPD. Retrieved from
Strategic human resource management: An overview. (2007). CIPD. Retrieved from
The best ways to reward employees. (2005). Retrieved from www.administaff.com/HR_tips_reward_employees.asp
Total reward. (2006). CIPD. Retrieved from
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